Hays v. Chattanooga Tank Wash, LLC

658 F.Supp.3d 589

James HAYS, Plaintiff, v. CHATTANOOGA TANK WASH, LLC, and O.J. Food Grade Tank Wash, Inc., Defendants.

Case No. 1:21-cv-37

United States District Court, E.D. Tennessee, Southern Division, at Chattanooga

Filed February 27, 2023

Douglas S. Hamill, Mikel & Hamill PLLC, Chattanooga, TN, for Plaintiff.

Daniel G. Austin, Pro Hac Vice, Austin Law Group LLC, Chicago, IL, Mark Litchford, Litchford, Pearce & Associates, Chattanooga, TN, for Defendants.

ORDER

CHARLES E. ATCHLEY, JR., UNITED STATES DISTRICT JUDGE

Before the Court is the Motion for Partial Summary Judgment [Doc. 56] of Plaintiff James Hays. Plaintiff seeks a determination as a matter of law that Defendant O.J. Food Grade Tank Wash, Inc. ("OJ") is his employer under the integrated enterprise doctrine for the purposes of this case in addition to Defendant Chattanooga Tank Wash, LLC ("CTW"). For the reasons below, Plaintiff's Motion for Partial Summary Judgment [Doc. 56] is GRANTED.

I. FACTUAL BACKGROUND

This lawsuit arises out of the allegedly retaliatory termination of Plaintiff James Hays from his employment with CTW in response to his whistleblowing activity in 2020. CTW is a tanker truck washing facility located at 900 Pineville Road in Chattanooga, Tennessee. [Doc. 56-1 at 3]. OJ is a tanker truck cleaning company with locations in 5 states. [Doc. 56-2 at 1]. CTW is one of OJ's facilities. [Id. at 4].

Jon Ruiter has been a 50% owner of CTW since 2008. [Doc. 56-4 at 2-3]. OJ has been a 50% owner of CTW since 2011. [Doc. 56-3 at 1]. Jay Brady is the president of OJ [Doc. 56-3 at 2] and the business partner of Jon Ruiter with respect to CTW. [Doc. 56-4 at 2-3]. Jay Brady is also the owner of OJ. [Doc. 56-4 at 3].

Karen Cutola is the Business Manager for OJ. [Doc. 56-3 at 1]. She handles a variety of administrative items for CTW including payroll, payables, receivables, the payment of insurance premiums, and some recordkeeping for CTW personnel documents. [Doc. 56-4 at 7-10]. CTW pays OJ $1,000 per week for administrative services [Doc. 56-4 at 10] and has performed these services since 2011. [Doc. 56-3 at 2].

Rusty Parker is the "Terminal Manager" of CTW. [Doc. 56-2 at 4]. He is listed on OJ's website as "Staff". [Id.]. Mr. Parker reports to Jon Ruiter and Jay Brady. [Doc. 56-1 at 5]. Mr. Parker interacts with Mr. Brady on a weekly basis and receives business advice regarding CTW's operations from Mr. Brady. [Doc. 56-1 at 6-8]. Mr. Parker discusses daily business activities with Karen Cutola on most days. [Id. at 11]. Mr. Parker also submits daily reports about CTW operations to OJ employee Josue Aguilar. [Id. at 12-13].

With regards to personnel management, according to Mr. Parker, he interviews potential new hires, but ultimately Ms. Cutola must give the final approval. [Doc. 56-1 at 14-15]. Mr. Parker asserts that OJ maintains copies of CTW personnel files. [Id. at 15-16]. According to Mr. Parker, Mr. Brady also has the authority to hire, fire, or discipline CTW personnel. [Docs. 56-1 at 8 and 56-4 at 11]. OJ disputes Mr. Parker's claim on this issue, pointing to Mr. Ruiter's claim that no one other than himself had the authority to fire or hire CTW employees, outside of Mr. Parker if Mr. Parker first discussed these decisions with Mr. Ruiter. [Doc. 69-3 at 14-15].¹ However, Mr. Ruiter admits that Mr. Brady has the authority to hire, fire, or discipline CTW employees. [Doc. 56-4 at 11].

Additionally, OJ claims that neither OJ nor any officers or business managers had any role in hiring or firing CTW employees during 2020, but were generally informed of important employment decisions by CTW. [Doc. 56-3 at 3]. OJ also denies Mr. Parker's admissions that Ms. Cutola handled human resource matters for CTW, was sent employee applications by Mr. Parker in 2020, and had approval authority for CTW hires in 2020. [Doc. 60-1 at 3].

Mr. Ruiter attests that OJ receives a weekly payment of $1,000 from CTW to handle administrative functions such as payroll, accounting, payment of insurance premiums, and recordkeeping for CTW personnel. [Doc. 56-4 at 8-10]. OJ also handles various banking functions for CTW. [Doc. 56-3 at 2]. Mr. Ruiter claims that while he is the only CTW employee who can transfer money in or out of CTW bank accounts, at least one OJ member (Mr. Brady) is authorized to transfer money in or out of CTW bank accounts. [Doc. 56-4 at 5].

One or two days prior to Mr. Hays' firing, Mr. Parker relayed to both Mr. Ruiter and Mr. Brady that Mr. Hays had engaged in whistleblowing. [Doc. 56-1 at 22-23]. Both men agreed with Mr. Parker that Mr. Hays should be fired. [Id.].

II. STANDARD OF REVIEW

Federal Rule of Civil Procedure 56 instructs the Court to grant summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A party asserting the presence or absence of genuine issues of material fact must support its position either by "citing to particular parts of materials in the record," including depositions, documents, affidavits or declarations, stipulations, or other materials, or by "showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56 (c)(1). When ruling on a motion for summary judgment, the Court must view the facts contained in the record and all inferences that can be drawn from those facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Nat'l Satellite Sports, Inc. v. Eliadis Inc., 253 F.3d 900, 907 (6th Cir. 2001). The Court cannot weigh the evidence, judge the credibility of witnesses, or determine the truth of any matter in dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

The moving party bears the initial burden of demonstrating that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party may discharge this burden either by producing evidence that demonstrates the absence of a genuine issue of material fact or simply "by 'showing' - that is, pointing out to the district court - that there is an absence of evidence to support the nonmoving party's case." Id. at 325, 106 S.Ct. 2548. Where the movant has satisfied this burden, the nonmoving party cannot "rest upon its . . . pleadings, but rather must set forth specific facts showing that there is a genuine issue for trial." Moldowan v. City of Warren, 578 F.3d 351, 374 (6th Cir. 2009) (citing Matsushita, 475 U.S. at 586, 106 S.Ct. 1348; Fed. R. Civ. P. 56). The nonmoving party must present sufficient probative evidence supporting its claim that disputes over material facts remain and must be resolved by a judge or jury at trial. Anderson, 477 U.S. at 248-49, 106 S.Ct. 2505 (citing First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)); see also White v. Wyndham Vacation Ownership, Inc., 617 F.3d 472, 475-76 (6th Cir. 2010). A mere scintilla of evidence is not enough; there must be evidence from which a jury could reasonably find in favor of the nonmoving party. Anderson, 477 U.S. at 252, 106 S.Ct. 2505; Moldowan, 578 F.3d at 374. If the nonmoving party fails to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof, the moving party is entitled to summary judgment. Celotex, 477 U.S. at 323, 106 S.Ct. 2548.

III. ANALYSIS

1. Single Employer/Integrated Enterprise Doctrine

Plaintiff argues that OJ is his employer alongside CTW under the "single employer" or "integrated enterprise" doctrine commonly applied in federal anti-discrimination cases. See EEOC v. Care Centers Mgmt. Consulting, Inc., 942 F. Supp. 2d 771, 778 (E.D. Tenn. 2013) (applying doctrine in ADA case). While the instant case stems from the Tennessee Public Protection Act ("TPPA") rather than federal law, Plaintiff asserts that a vacated 2019 Tennessee Court of Appeals opinion supports the application of the single employer test to TPPA claims. [Doc. 57 at 6]. See Whitney v. First Call Ambulance Serv., 2019 WL 1594929 (Tenn. Ct. App. Apr. 15, 2019), opinion vacated on rehearing on other grounds, 2019 WL 2053526 (Tenn. Ct. App. May 6, 2019). In that opinion, the Court of Appeals found that no prior Tennessee state cases addressed how to establish a single employer relationship between two separate entities in the context of a TPPA claim with no federal claim attached. The court accepted a district court's reasoning from the Middle District of Tennessee applying the federal single employer test to a plaintiff's Title VII, THRA, and TPPA claims.² Id. Defendant argues that other than the vacated opinion, there is no persuasive Tennessee authority on this issue. [Doc. 60 at 3]. Instead, Defendant argues the state legislature's historical stance of protecting employers from joint liability absent specific circumstances removes any authority for applying the integrated enterprise doctrine to TPPA claims [Id.].

A vacated state court opinion is not binding on this Court, but the Court does find the Whitney opinion instructive. Combined with the decision in Passmore that analyzed a TPPA claim through the federal single employer analysis, and the notable lack of any other on-point precedent,³ the Court will apply the single employer/integrated enterprise analysis in the instant case.

Courts in the Sixth Circuit apply the Armbruster test to determine whether two entities will be treated as a single employer. Armbruster v. Quinn, 711 F.2d 1332 (6th Cir. 1983). The test turns on four factors: 1) interrelation of operations, i.e., common offices, common record keeping, and shared bank accounts and equipment; 2) common management, common...